Founder and Strategist, Entext Economics & Strategy

Sean Maher

Founder and Strategist

Entext Economics & Strategy

Entext provides institutional investors with distinctive, actionable asset allocation and thematic research, which typically challenges the market consensus. Our clients range from credit, equity and multi-asset hedge and pension funds to family offices and sovereign funds. 
 
We focus on identifying key inflection points in macro data and relative asset performance amid the 'groupthink'  and confirmation bias that characterizes most investment bank analysis.

Macro Driven Investment Insight

Thematic (Sector/Industry)

I began my recent Asia trip speaking at an investor conference in Vietnam, where I focused on the shift in the EM development model toward value added services as ubiquitous smartphones and broadband created a ‘leapfrog’ effect plugging infrastructure deficits (not just physical, but also including weak institutions). Services only came to dominate growth in developed economies from the 1970s as manufacturing share declined at a relatively high level of per capita income, but for today’s EMs it is happening at a much lower threshold and that trend has been very apparent at the granular level on my week-long China visit and should be borne in mind when parsing the macro data. As covered previously, it seems very likely that services activity is being systematically underestimated in the China GDP data given its ‘kick the tyres’ statistical bias.

I began my recent Asia trip speaking at an investor conference in Vietnam, where I focused on the shift in the EM development model toward value added services as ubiquitous smartphones and broadband created a ‘leapfrog’ effect plugging infrastructure deficits (not just physical, but also including weak institutions). Services only came to dominate growth in developed economies from the 1970s as manufacturing share declined at a relatively high level of per capita income, but for today’s EMs it is happening at a much lower threshold and that trend has been very apparent at the granular level on my week-long China visit and should be borne in mind when parsing the macro data. As covered previously, it seems very likely that services activity is being systematically underestimated in the China GDP data given its ‘kick the tyres’ statistical bias.

China Trip Notes - Education Spend On Korean Path…

Overseas Chinese Equities, Aequitas Research

Ming Lu

Overseas Chinese Equities

Equity Bottom-Up

China Maple Leaf Educational Systems / Equity Bottom-Up

Shares of all Hong Kong listed Chinese private schools plunged on Monday, August 13, with some of them plummeted more than 30% in a day. 
What had happened? The draft for comment of “the Implementation Rules on the Promotion of Private School (Draft for Amendment) (Draft for Approval)” was posted on the website of the Ministry of Justice of China (MOJ) <a href="http://www.moj.gov.cn/government_public/content/2018-08/10/tzwj_38279.html" target="_blank">http://www.moj.gov.cn/government_public/content/2018-08/10/tzwj_38279.html</a> on August 10, last Friday.
Abnormal Re-comment
The legal jargon in the…

Shares of all Hong Kong listed Chinese private schools plunged on Monday, August 13, with some of them plummeted more than 30% in a day. 
What had happened? The draft for comment of “the Implementation Rules on the Promotion of Private School (Draft for Amendment) (Draft for Approval)” was posted on the website of the Ministry of Justice of China (MOJ) http://www.moj.gov.cn/government_public/content/2018-08/10/tzwj_38279.html on August 10, last Friday.
Abnormal Re-comment
The legal jargon in the…

Maple Leaf (1317) – Private Schools Plunged Due to Proposed Law

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

MSCI Emerging Markets Index / Technical Analysis

The MSCI EM index has recovered over the last couple of weeks and is now approaching a logical resistance level. We reiterate: avoid broad EM exposure and be selective.  India’s S&amp;P BSE SENSEX is our top country-specific EM index recommendation, overweight India. We also provide an update on Brazil’s Bovespa, which has surged over the last month following a steep selloff. We are skeptical that the index will be able to continue its unabated advance.  Today’s report also includes a wide variety of bottom-up recommendations spanning most sectors and all market capitalizations.

The MSCI EM index has recovered over the last couple of weeks and is now approaching a logical resistance level. We reiterate: avoid broad EM exposure and be selective.  India’s S&amp;P BSE SENSEX is our top country-specific EM index recommendation, overweight India. We also provide an update on Brazil’s Bovespa, which has surged over the last month following a steep selloff. We are skeptical that the index will be able to continue its unabated advance.  Today’s report also includes a wide variety of bottom-up recommendations spanning most sectors and all market capitalizations.

EM Strategy: MSCI EM Approaching Resistance; India Breaking Out to New Highs -- Add Exposure

<ul><li>Most private school operators are also property developers.</li><li>Schools provide stable cash inflows, so that some developers stopped property investment to focus on schools.</li><li>The 1st risk: Property developers may borrow money from schools. They did that before.</li><li>The 2nd risk: Property developers are schools’ landlords and the lease contracts will be based on re-negotiations between relatives.  This raises corporate governance issues.</li><li>In general, we are still optimistic about private schools.</li></ul>

Most private school operators are also property developers.Schools provide stable cash inflows, so that some developers stopped property investment to focus on schools.The 1st risk: Property developers may borrow money from schools. They did that before.The 2nd risk: Property developers are schools’ landlords and the lease contracts will be based on re-negotiations between relatives.  This raises corporate governance issues.In general, we are still optimistic about private schools.

Key Risk to Private Schools: Property Developers Standing Behind

APAC IPOs & Placements

Zhen Zhou, Toh

Smartkarma

Smartkarma unites the fragmented investment industry, connecting institutional investors, independent research providers, and corporates within a single network.

Research Reinvented

Equity Capital Markets

China Xinhua Education / Equity Capital Markets

<a href="https://www.smartkarma.com/entities/26106" target="_blank" data-smartkarma-citation="entities:26106:1">China Xinhua Education (CXE HK)</a> is raising about US$166m in its upcoming IPO. Proceeds raised will be mostly used for acquisition, improvement of school facilities and working capital.In this insight, we will recap key points from our previous insight and analysis done by other Insight Providers, <a href="https://www.smartkarma.com/profiles/1680" target="_blank" data-smartkarma-citation="accounts:1680">Arun George</a> and <a href="https://www.smartkarma.com/profiles/803" target="_blank" data-smartkarma-citation="accounts:803">Valerie Law, CFA</a> . We will also evaluate the updated financials of the company, put across our thoughts on the company's Q&amp;A during the press conference, and value the company against…

China Xinhua Education (CXE HK) is raising about US$166m in its upcoming IPO. Proceeds raised will be mostly used for acquisition, improvement of school facilities and working capital.In this insight, we will recap key points from our previous insight and analysis done by other Insight Providers, Arun George and Valerie Law, CFA . We will also evaluate the updated financials of the company, put across our thoughts on the company's Q&amp;A during the press conference, and value the company against…

China Xinhua Edu IPO Review - Re-Rate in Valuation Will Have to Come from Acquisitions

China

Wisdom Education International Holdings Co., Ltd. provides educational services. The Company offers educational services in mathematics, arts, languages, music, and sports. Wisdom Education International Holdings serves students in China and Hong Kong.

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Wisdom Education (6068 HK)

China Trip Notes - Education Spend On Korean Path…

I began my recent Asia trip speaking at an investor conference in Vietnam, where I focused on the shift in the EM development model toward value...

Sean Maher

Maple Leaf (1317) – Private Schools Plunged Due to Proposed Law

Shares of all Hong Kong listed Chinese private schools plunged on Monday, August 13, with some of them plummeted more than 30% in a day. What had...

Ming Lu

EM Strategy: MSCI EM Approaching Resistance; India Breaking Out to New Highs -- Add Exposure

The MSCI EM index has recovered over the last couple of weeks and is now approaching a logical resistance level. We reiterate: avoid broad EM...

Vermilion Research

Key Risk to Private Schools: Property Developers Standing Behind

Most private school operators are also property developers. Schools provide stable cash inflows, so that some developers stopped property...

Ming Lu

China Xinhua Edu IPO Review - Re-Rate in Valuation Will Have to Come from Acquisitions

China Xinhua Education (CXE HK) is raising about US$166m in its upcoming IPO. Proceeds raised will be mostly used for acquisition, improvement of...

Zhen Zhou, Toh

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)